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Sony reports $1 billion annual loss

The electronics giant suffers its first yearly loss in more than a decade, as it struggles with the economic downturn, PlayStation losses, and more.

The global recession has hit Sony hard--the company on Thursday reported its first annual loss in 14 years.

Sony lost 165 billion yen ($1.72 billion) in the quarter that ended March 31, the fourth quarter of its fiscal year, compared with net income of 29 billion yen in the year-ago period. Revenue for the three-month period was 1.5 trillion yen ($15.5 billion), a drop of 22 percent from a year earlier.

Adding that to the previous three quarters of fiscal 2008, the company saw an annual loss of 98.9 billion yen ($1 billion). The loss was a dramatic reversal from the preceding fiscal year, when Sony earned 369.4 billion yen. The company blamed the decline on lower sales, increased competition, the stronger value of the yen, and the sluggish Japanese stock market. Annual revenue dropped 13 percent to 7.73 trillion yen ($78.8 billion).

Sony's 2008 Results
Sony's 2008 Results Sony

The downturn is forcing Sony to cut costs and staff. The company plans to shut down three manufacturing plants in Japan, reducing the number of worldwide plants from 57 to 49. Sony says it is on track to eliminate 8,000 jobs by year's end, mostly through forced retirement. The company now hopes to reduce costs by 300 billion yen for the year ahead

Despite these steps, Sony said it doesn't expect a recovery anytime soon and is projecting a 120 billion yen ($1.2 billion) loss for the fiscal year through March 2010.

Since taking over as Sony CEO, Howard Stringer has been on the move to cut costs, reorganize, and shake up the company's status quo.

Sony's business segments each saw a sales drop. In the gaming arena, revenue from the various PlayStation game consoles sunk 18 percent in the face of competition from the Nintendo Wii and DS and Microsoft's Xbox 360.

Revenue in the electronics business declined 17 percent. Sales were actually up for Sony's Bravia HDTVs, but down for camcorders, digital cameras, and PCs.

On the entertainment side, sales dropped 16.4 percent. Motion picture and TV revenues grew but were offset by a slide in the home video market.